NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1—OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Our Business
IEC Electronics Corp. (“IEC,” “we,” “our,” “us,” the “Company”) provides electronic manufacturing services (“EMS”) to advanced technology companies that produce life-saving and mission critical products for the medical, industrial, aerospace and defense sectors. The Company specializes in delivering technical solutions for the custom manufacture of complex full system assemblies by providing on-site analytical testing laboratories, custom design and test engineering services combined with a broad array of manufacturing services encompassing electronics, interconnect solutions, and precision metalworking. As a full service EMS provider, IEC holds all appropriate certifications for the market sectors it supports including ISO 9001:2008, AS9100C, ISO 13485 and Nadcap. IEC is headquartered in Newark, NY and also has operations in Rochester, NY and Albuquerque, NM. Additional information about IEC can be found on its website at
www.iec-electronics.com
. The contents of this website are not incorporated by reference into this quarterly report.
Generally Accepted Accounting Principles
IEC’s financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”).
Fiscal Calendar
The Company’s fiscal year ends on September 30th and the first three quarters generally end on the Friday closest to the last day of the calendar quarter. For the fiscal year ending
September 30, 2017
(“fiscal 2017”), the fiscal quarters ended on
December 30, 2016
,
March 31, 2017
and
June 30, 2017
. For the fiscal year ended
September 30, 2016
(“fiscal 2016”), the fiscal quarters ended on
January 1, 2016
,
April 1, 2016
and
July 1, 2016
.
Consolidation
The consolidated financial statements include the accounts of IEC and its wholly-owned subsidiaries: IEC Electronics Wire and Cable, Inc. (“Wire and Cable”) that merged into IEC on December 28, 2016; IEC Electronics Corp-Albuquerque (“Albuquerque”); IEC Analysis & Testing Laboratory, LLC (“ATL”), formerly Dynamic Research and Testing Laboratories, LLC; and IEC California Holdings, Inc. The Rochester unit, formerly Celmet, operates as a division of IEC. All intercompany transactions and accounts are eliminated in consolidation.
Unaudited Financial Statements
The accompanying unaudited condensed consolidated financial statements for the
three and nine months ended
June 30, 2017
and
July 1, 2016
have been prepared without an audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not include certain of the information the footnotes require by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, required for a fair presentation of the information have been made. The accompanying financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended
September 30, 2016
.
Cash
The Company’s cash represents deposit accounts with Manufacturers and Traders Trust Company (“M&T Bank”), a banking corporation headquartered in Buffalo, NY.
Allowance for Doubtful Accounts
The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management’s evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote.
Inventory Valuation
Inventories are stated at the lower of cost or market value under the first-in, first-out method. The Company regularly assesses slow-moving, excess and obsolete inventory and maintains balance sheet reserves in amounts required to reduce the recorded value of inventory to the lower of cost or market.
Property, Plant and Equipment
Property, plant and equipment (“PP&E”) are stated at cost and are depreciated over various estimated useful lives using the straight-line method. Maintenance and repairs are charged to expense as incurred, while renewals and improvements are capitalized. At the time of retirement or other disposition of PP&E, cost and accumulated depreciation are removed from the accounts and any gain or loss is recorded in earnings.
Depreciable lives generally used for PP&E are presented in the table below. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life of the improvement.
|
|
|
|
|
|
|
PP&E Lives
|
|
Estimated
Useful Lives
|
|
|
|
(years)
|
|
Land improvements
|
|
10
|
|
Buildings and improvements
|
|
5 to 40
|
|
Machinery and equipment
|
|
3 to 5
|
|
Furniture and fixtures
|
|
3 to 7
|
Reviewing Long-Lived Assets for Potential Impairment
ASC 360-10 (Property, Plant and Equipment) and ASC 350-30 (Intangibles) require the Company to test long-lived assets (PP&E and definitive lived assets) for recoverability whenever events or circumstances indicate that the carrying amount may not be recoverable. If carrying value exceeds undiscounted future cash flows attributable to an asset, it is considered impaired and the excess of carrying value over fair value must be charged to earnings.
No
impairment charges were identified or recorded by IEC for PP&E or intangible assets during the
three and nine months ended
June 30, 2017
and
July 1, 2016
.
Leases
At the inception of a lease covering equipment or real estate, the lease agreement is evaluated under criteria discussed in ASC 840-10-25 (Leases). Leases meeting one of four key criteria are accounted for as capital leases and all others are treated as operating leases. Under a capital lease, the discounted value of future lease payments becomes the basis for recognizing an asset and a borrowing, and lease payments are allocated between debt reduction and interest. For operating leases, payments are recorded as rent expense. Criteria for a capital lease include (i) transfer of ownership during the lease term; (ii) existence of a bargain purchase option under terms that make it likely to be exercised; (iii) a lease term equal to 75 percent or more of the economic life of the leased property; and (iv) minimum lease payments that equal or exceed 90 percent of the fair value of the property.
Legal Contingencies
When legal proceedings are brought or claims are made against the Company and the outcome is uncertain, ASC 450-10 (Contingencies) requires that the Company determine whether it is probable that an asset has been impaired or a liability has been incurred. If such impairment or liability is probable and the amount of loss can be reasonably estimated, the loss must be charged to earnings.
When it is considered probable that a loss has been incurred, but the amount of loss cannot be estimated, disclosure but not accrual of the probable loss is required. Disclosure of a loss contingency is also required when it is reasonably possible, but not probable, that a loss has been incurred.
Customer Deposits
Customer deposits represent amounts invoiced to customers for which the revenue has not yet been earned and therefore represent a commitment for the Company to deliver goods or services in the future. Deposits are generally short term in nature and are recognized as revenue when earned.
Grants from Outside Parties
Grants from outside parties are recorded as other long-term liabilities and are amortized over the same period during which the associated PP&E are depreciated. The Company received grants for certain facility improvements and equipment from state and local agencies in which the Company operates. These grants reimbursed the Company for a portion of the actual cost or provided in kind services in support of capital projects.
There were
no
deferred grants recorded during the
three and nine months ended
June 30, 2017
. The outstanding grant balance was
$0.2 million
and
$0.3 million
at
June 30, 2017
and
September 30, 2016
, respectively.
Fair Value Measurements
Under ASC 825 (Financial Instruments), the Company is required to disclose the fair value of financial instruments for which it is practicable to estimate value. The Company’s financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities and borrowings. IEC believes that recorded value approximates fair value for all cash, accounts receivable, accounts payable and accrued liabilities. See
Note 6—Fair Value of Financial Instruments
for a discussion of the fair value of IEC’s borrowings.
ASC 820 (Fair Value Measurements and Disclosures) defines fair value, establishes a framework for measurement, and prescribes related disclosures. ASC 820 defines fair value as the price that would be received upon sale of an asset or would be paid to transfer a liability in an orderly transaction. Inputs used to measure fair value are categorized under the following hierarchy:
Level 1: Quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date.
Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which all significant inputs are observable market data.
Level 3: Model-derived valuations in which one or more significant inputs are unobservable.
The Company deems a transfer between levels of the fair value hierarchy to have occurred at the beginning of the reporting period. There were no such transfers during each of the
three and nine
months of fiscal 2017 or fiscal
2016
.
Revenue Recognition
The Company’s revenue is principally derived from the sale of electronic products built to customer specifications, but also from other value-added support services and repair work. Revenue from product sales is recognized when (i) goods are shipped or title and risk of ownership have passed, (ii) the price to the buyer is fixed or determinable, and (iii) realization is reasonably assured. Service revenue is generally recognized once the service has been rendered. Service revenue, including material management, design and repair work revenue, amounted to less than
5%
of total revenue in each of the
three and nine months ended
June 30, 2017
and
July 1, 2016
.
Provisions for discounts, allowances, rebates, estimated returns and other adjustments are recorded in the period the related sales are recognized.
Stock-Based Compensation
ASC 718 (Stock Compensation) requires that compensation expense be recognized for equity awards based on fair value as of the date of grant. For stock options, the Company uses the Black-Scholes pricing model to estimate grant date fair value. Costs associated with stock awards are recorded over requisite service periods, generally the vesting period. If vesting is contingent on the achievement of performance objectives, fair value is accrued over the period the objectives are expected to be achieved only if it is considered probable that the objectives will be achieved. The Company also has an employee stock purchase plan (“ESPP”) that provides for the purchase of Company common stock at a discounted stock purchase price. Compensation expense related to the discount is recognized as employees contribute to the plan.
Legal Expense Accrual
The Company records legal expenses as they are incurred, based on invoices received or estimates provided by legal counsel. Future estimated legal expenses are not recorded until incurred.
Income Taxes and Deferred Taxes
ASC 740 (Income Taxes) requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns, but not in both. Deferred tax assets are also established for tax benefits associated with tax loss and tax credit carryforwards. Such deferred balances reflect tax rates that are scheduled to be in effect, based on currently enacted legislation, in the years the book/tax differences reverse and tax loss and tax credit carryforwards are expected to be realized. An allowance is established for any deferred tax asset for which realization is not likely.
ASC 740 also prescribes the manner in which a company measures, recognizes, presents and discloses in its financial statements uncertain tax positions that a company has taken or expects to take on a tax return. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the position will be sustained following examination by taxing authorities, based on technical merits of the position. The Company believes that it has no material uncertain tax positions.
Any interest incurred is reported as interest expense. Any penalties incurred are reported as tax expense. The Company’s income tax filings are subject to audit by various tax jurisdictions and current open years are the fiscal year ended September 30, 2014 through fiscal year ended September 30, 2016. The federal income tax audit for the fiscal year ended September 30, 2013 concluded during the
first nine months
of fiscal 2017 and resulted in no change to reported tax.
Dividends
IEC does not pay dividends on its common stock as it is the Company’s current policy to retain earnings for use in the business. Furthermore, the Company’s Fifth Amended and Restated Credit Facility Agreement, as amended, with M&T Bank includes certain restrictions on paying cash dividends, as more fully described in
Note 5—Credit Facilities
.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and the disclosure of contingent assets and liabilities. Actual results may differ from management’s estimates.
Statements of Cash Flows
The Company presents operating cash flows using the indirect method of reporting under which non-cash income and expense items are removed from net income.
Recently Issued Accounting Standards Not Yet Adopted
FASB Accounting Standard Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” (“Topic 606”) was issued May 2014 and updates the principles for recognizing revenue. This ASU will supersede most of the existing revenue recognition requirements in GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which a company expects to be entitled in exchange for transferring goods or services to a customer. This ASU also amends the required disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. FASB ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations” was issued in March 2016 and improves implementation guidance on principal versus agent considerations. FASB ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” was issued in April 2016 and adds further guidance on identifying performance obligations as well as improving licensing implementation guidance. FASB ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” was issued in June 2016 and clarifies the objective of the collectability criterion, presentation of taxes collected from customers, non-cash consideration, contract modifications at transition, completed contracts at transition and how guidance in Topic 606 is retrospectively applied. The amendments do not change the core principle of the guidance in Topic 606. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that period. Early adoption is permitted for annual periods beginning after December 15, 2016. The Company is continuing to evaluate the effect this guidance will have on its consolidated financial statements, including potential impacts on the amount and timing of revenue recognition and additional information that may be necessary
for the required expanded disclosures. The Company has identified key personnel to evaluate the guidance and attended training, and started the process to formulate a time line to review the Company’s revenue streams, existing inventory contracts, and apply the five-step model to those contracts to evaluate the quantitative and qualitative impacts of the new standard. The Company plans to adopt this ASU, as amended, in the first quarter of fiscal 2019.
FASB ASU 2015-11, “Simplifying the Measurement of Inventory” was issued in July 2015. This requires entities to measure most inventory “at the lower of cost and net realizable value,” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. This ASU will not apply to inventories that are measured by using either the last-in, first-out method or the retail inventory method. For public business entities, this ASU is effective prospectively for annual periods beginning after December 15, 2016, and interim periods therein. Upon transition, entities must disclose the nature of and reason for the accounting change. The Company does not anticipate a significant impact on its financial statements upon adoption.
FASB ASU 2015-17, “Income Taxes Balance Sheet Classification of Deferred Taxes” was issued in November 2015. This requires entities to classify deferred tax liabilities and assets as noncurrent in a classified statement of financial position and applies to all entities that present a classified statement of financial position. For public entities, this update is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not anticipate a significant impact on its financial statements upon adoption.
FASB ASU 2016-02, “Leases” was issued in February 2016. The new guidance establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. For public entities, the new guidance is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted for all entities. The Company is evaluating the impact this ASU will have on its financial statements.
FASB ASU 2016-09, “Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting” was issued in March 2016. This simplifies accounting for several aspects of share-based payment including income tax consequences, classification of awards as either equity or liability and classification on the statement of cash flows. For public entities, this update is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not anticipate a significant impact on its financial statements upon adoption.
FASB ASU 2016-15 “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments: A Consensus of the FASB Emerging Issues Task Force” was issued in August 2016. This ASU clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. For public entities, this update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company does not anticipate a significant impact on its financial statements upon adoption.
NOTE 2—ALLOWANCE FOR DOUBTFUL ACCOUNTS
A summary of activity in the allowance for doubtful accounts during the
nine months ended
June 30, 2017
and
July 1, 2016
follows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
Allowance for doubtful accounts
|
|
June 30,
2017
|
|
July 1,
2016
|
|
(in thousands)
|
|
|
|
|
|
Allowance, beginning of period
|
|
$
|
226
|
|
|
$
|
423
|
|
|
(Reversal)/provision for doubtful accounts
|
|
(169
|
)
|
|
253
|
|
|
Write-offs/recoveries
|
|
15
|
|
|
(298
|
)
|
|
Allowance, end of period
|
|
$
|
72
|
|
|
$
|
378
|
|
NOTE 3—INVENTORIES
A summary of inventory by category at period end follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
June 30,
2017
|
|
September 30,
2016
|
|
(in thousands)
|
|
|
|
|
|
|
Raw materials
|
|
$
|
8,872
|
|
|
$
|
7,513
|
|
|
Work-in-process
|
|
6,681
|
|
|
5,932
|
|
|
Finished goods
|
|
2,678
|
|
|
1,939
|
|
|
Inventories
|
|
$
|
18,231
|
|
|
$
|
15,384
|
|
NOTE 4—PROPERTY, PLANT & EQUIPMENT
A summary of property, plant and equipment and accumulated depreciation at period end follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, Plant & Equipment
|
|
June 30,
2017
|
|
September 30,
2016
|
|
(in thousands)
|
|
|
|
|
|
Land and improvements
|
|
$
|
788
|
|
|
$
|
788
|
|
|
Buildings and improvements
|
|
8,910
|
|
|
8,910
|
|
|
Building under capital lease
|
|
5,750
|
|
|
—
|
|
|
Machinery and equipment
|
|
27,944
|
|
|
26,905
|
|
|
Furniture and fixtures
|
|
7,476
|
|
|
7,489
|
|
|
Construction in progress
|
|
3,516
|
|
|
3,079
|
|
|
Total property, plant and equipment, at cost
|
|
54,384
|
|
|
47,171
|
|
|
Accumulated depreciation
|
|
(37,513
|
)
|
|
(36,177
|
)
|
|
Property, plant and equipment, net
|
|
$
|
16,871
|
|
|
$
|
10,994
|
|
Depreciation expense during the
three and nine months ended
June 30, 2017
and
July 1, 2016
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
June 30,
2017
|
|
July 1,
2016
|
|
June 30,
2017
|
|
July 1,
2016
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
Depreciation expense
|
|
$
|
624
|
|
|
$
|
717
|
|
|
$
|
1,921
|
|
|
$
|
2,364
|
|
NOTE 5—CREDIT FACILITIES
A summary of borrowings at period end follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
September 30, 2016
|
|
Debt
|
|
Fixed/ Variable
Rate
|
|
Maturity
Date
|
|
Balance
|
|
Interest Rate
|
|
Balance
|
|
Interest Rate
|
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M&T credit facilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving Credit Facility
|
|
v
|
|
5/5/2022
|
|
$
|
9,590
|
|
|
3.72
|
%
|
|
$
|
3,961
|
|
|
3.28
|
%
|
|
Term Loan A
(1)
|
|
f
|
|
2/1/2020
|
|
—
|
|
|
—
|
|
|
3,693
|
|
|
3.98
|
|
|
Term Loan B
|
|
v
|
|
5/5/2022
|
|
5,928
|
|
|
3.80
|
|
|
8,983
|
|
|
3.03
|
|
|
Albuquerque Mortgage Loan
(1)
|
|
v
|
|
2/1/2018
|
|
—
|
|
|
—
|
|
|
2,200
|
|
|
3.55
|
|
|
Celmet Building Term Loan
|
|
f
|
|
11/7/2018
|
|
834
|
|
|
4.72
|
|
|
932
|
|
|
4.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other credit facilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Albuquerque Industrial Revenue Bond
(1)
|
|
f
|
|
3/1/2019
|
|
—
|
|
|
—
|
|
|
100
|
|
|
5.63
|
|
|
Total debt, gross
|
|
|
|
|
|
16,352
|
|
|
|
|
19,869
|
|
|
|
|
Unamortized debt issuance costs
|
|
|
|
|
|
(288
|
)
|
|
|
|
(229
|
)
|
|
|
|
Total debt, net
|
|
|
|
|
|
16,064
|
|
|
|
|
19,640
|
|
|
|
|
Less: current portion
|
|
|
|
|
|
(987
|
)
|
|
|
|
(2,908
|
)
|
|
|
|
Long-term debt
|
|
|
|
|
|
$
|
15,077
|
|
|
|
|
$
|
16,732
|
|
|
|
(1)
The Albuquerque Mortgage Loan and the Albuquerque Industrial Revenue Bond were repaid in connection with the sale-leaseback transaction described in
Note 12—Capital Lease
. The proceeds from the transaction were also used to pay down Term Loan A, which was subsequently paid off in due course.
M&T Bank Credit Facilities
Effective as of
May 5, 2017
, the Company and M&T Bank entered into the Third Amendment to Fifth Amended and Restated Credit Agreement (the “Third Amendment”), that amended the Fifth Amended Credit Agreement dated as of December 14, 2015, as amended by the First Amendment to Fifth Amended and Restated Credit Facility, dated as of June 20, 2016, and the Second Amendment to Fifth Amended and Restated Credit Facility agreement dated as of November 28, 2016 (“Fifth Amended Credit Agreement”). The Third Amendment extended the Revolver termination date to May 5, 2022. In connection with the Third Amendment, the Term Loan B to M&T Bank was amended and restated. The Third Amendment revised certain covenants to provide that the Company may use Revolver proceeds to refinance existing indebtedness. As a result, the Term Loan B, which matures on May 5, 2022, now has a principal amount of
$6.0 million
. The Third Amendment also revised the maximum amount the Company can borrow under the Revolver to the lesser of
$16.0 million
or
85%
of eligible receivables plus up to
$7.0 million
of eligible inventories. The Third Amendment also modified the definitions of Applicable Margin and Applicable Unused Fee to provide that each is calculated using the applicable Fixed Charge Coverage Ratio, as redefined by the Third Amendment. The Third Amendment established a Borrowing Base computed using monthly Borrowing Base Reports that, if inaccurate, allow M&T Bank, in its discretion, to suspend the making of or limit Revolving Credit Loans. Further, the Third Amendment provides for the Company’s repurchase of its common stock under certain circumstances without M&T Bank’s prior written consent.
Individual debt facilities provided under the Fifth Amended Credit Agreement, as amended, are described below:
|
|
|
|
a)
|
Revolving Credit Facility (“Revolver”)
: Up to
$16.0 million
is available through
May 5, 2022
. The maximum amount the Company may borrow is determined based on a borrowing base calculation described below.
|
|
|
|
|
b)
|
Term Loan A
:
$10.0 million
was borrowed on January 18, 2013. Principal was being repaid in
108 equal monthly installments
of
$93 thousand
. The proceeds of the sale-leaseback transaction described in
Note 12—Capital Lease
were used to pay down the loan, which was paid off January 1, 2017.
|
|
|
|
|
c)
|
Term Loan B:
$14.0 million
was borrowed on January 18, 2013. Principal was being repaid in
120 equal monthly installments
of
$117 thousand
. As part of the Third Amendment, the principal was modified to
$6.0 million
and principal is being repaid in equal monthly installments of
$71 thousand
.
|
|
|
|
|
d)
|
Albuquerque
Mortgage Loan
:
$4.0 million
was borrowed on December 16, 2009. The loan was secured by real property in Albuquerque, NM, and principal was being repaid in equal
monthly installments
of
$22 thousand
. The loan was repaid in connection with the sale-leaseback transaction described in
Note 12—Capital Lease
.
|
|
|
|
|
e)
|
Celmet Building Term Loan:
$1.3 million
was borrowed on November 8, 2013 pursuant to an amendment to the Fourth Amended and Restated Credit Facility Agreement dated as of January 18, 2013. The proceeds were used to reimburse the Company’s cost of purchasing its Rochester, New York facility. Principal is being repaid in
59 equal monthly installments
of
$11 thousand
plus a balloon payment of
$672 thousand
due at maturity.
|
Borrowing Base
Under the Fifth Amended Credit Agreement, as amended, the maximum amount the Company can borrow under the Revolver is the lesser of (i)
85%
of eligible receivables plus a percentage of eligible inventories (up to a cap of
$7.0 million
) or (ii)
$16.0 million
at
June 30, 2017
and
$20.0 million
at
September 30, 2016
.
At
June 30, 2017
and
September 30, 2016
, the upper limit on Revolver borrowings was
$16.0 million
and
$16.4 million
, respectively. Average Revolver balances amounted to
$5.0 million
during the
nine months ended
June 30, 2017
.
Interest Rates
Under the Fifth Amended Credit Agreement, variable rate debt accrues interest at LIBOR plus the applicable marginal interest rate that fluctuates based on the Company’s Fixed Charge Coverage Ratio, as defined below. Under the Third Amendment, the applicable marginal interest rate was fixed on May 5, 2017 through the fiscal quarter ending March 31, 2018, as follows:
2.50%
for the Revolver and
2.75%
for Term Loan B. Changes to applicable margins and unused fees resulting from the Fixed Charge Coverage Ratio generally become effective mid-way through the subsequent quarter.
The Company incurs quarterly unused commitment fees ranging from
0.250%
to
0.375%
of the excess of
$16.0 million
over average borrowings under the Revolver. Fees incurred amounted to
$11.7 thousand
and
$21.1 thousand
during the three months ended
June 30, 2017
and
July 1, 2016
, respectively. Fees incurred amounted to
$43.6 thousand
and
$44.9 thousand
during the
nine months ended
June 30, 2017
and
July 1, 2016
, respectively. The fee percentage varies based on the Company’s Fixed Charge Coverage Ratio, as defined below.
Financial Covenants
The Fifth Amended Credit Agreement, as amended, also contains various affirmative and negative covenants including financial covenants. Pursuant to the Third Amendment, as of March 31, 2017, certain financial covenants of the credit facility were eliminated or revised to be less complex, including the Maximum Inventory covenant, Debt to EBITDAS ratios, the Maximum Capital Expenditures limit after the fiscal year ending September 30, 2017, and future requirements of Minimum Quarterly EBITDAS except for the fiscal quarter ended June 30, 2017. The Company is required to maintain (i) for the quarter ended June 30, 2017, a minimum level of quarterly EBITDAS, as defined below (“Quarterly EBITDAS”), (ii) a minimum fixed charge coverage ratio (“Fixed Charge Coverage Ratio”), and (iii) a maximum amount of capital expenditures (“Maximum Capital Expenditures”). “EBITDAS” is defined as earnings before interest, taxes, depreciation, amortization and non-cash stock compensation expense. The Fixed Charge Coverage Ratio compares (i) EBITDAS minus unfinanced capital expenditures minus taxes paid, to (ii) the sum of interest expense, principal payments, payments on all capital lease obligations and dividends, if any (fixed charges). The Fixed Charge Coverage Ratio will initially be measured for a trailing six months ended September 30, 2017. The Maximum Capital Expenditures covenants allow for a maximum amount of capital expenditures on an annual basis for fiscal 2017.
Covenant ratios in effect at
June 30, 2017
, pursuant to the Fifth Amended Credit Agreement, as amended by the Third Amendment, are as follows:
|
|
|
|
|
|
|
|
|
Minimum Quarterly EBITDAS:
|
|
|
|
Fiscal Quarter ended 6/30/2017, using trailing twelve months
|
|
$
|
2,323,300
|
|
|
Maximum Capital Expenditures:
|
|
|
|
Measured annually
|
|
Maximum $3.5m
|
|
The Fifth Amended Credit Agreement provides for customary events of default, subject in certain cases to customary cure periods, in which the outstanding balance and any unpaid interest would become due and payable.
The Company was in compliance with all debt covenants at
June 30, 2017
.
Other Borrowings
When IEC acquired Albuquerque, the Company assumed responsibility for a
$0.1 million
Industrial Revenue Bond issued by the City of Albuquerque. Interest on the bond was paid semiannually, and principal was due in its entirety at maturity. The Bond was repaid in connection with the sale-leaseback transaction described in
Note 12—Capital Lease
.
Contractual Principal Payments
A summary of contractual principal payments under IEC’s borrowings for the next five years taking into consideration the Fifth Amended Credit Agreement, as amended, follows:
|
|
|
|
|
|
|
|
|
|
Debt Repayment Schedule
|
|
Contractual
Principal
Payments
|
|
(in thousands)
|
|
|
|
|
Twelve months ended June
|
|
|
|
|
2018
|
|
|
$
|
987
|
|
|
2019
|
(1)
|
|
1,561
|
|
|
2020
|
|
|
857
|
|
|
2021
|
|
|
857
|
|
|
2022 and thereafter
(2)
|
|
12,090
|
|
|
|
|
|
$
|
16,352
|
|
(1)
Includes final payment of the Celmet Building Term Loan on
November 7, 2018
.
(2)
Includes Revolver balance of
$9.6 million
at
June 30, 2017
.
NOTE 6—FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial Instruments Carried at Historical Cost
The Company’s long-term debt is not quoted. Fair value was estimated using a discounted cash flow analysis based on Level 2 valuation inputs, including borrowing rates the Company believes are currently available to it for loans with similar terms and maturities.
The Company's debt is carried at historical cost on the balance sheet. The fair value and carrying value of the Celmet Building Term Loan at June 30, 2017 were both
$0.8 million
. The fair value and carrying value of the Celmet Building Term Loan as of September 30, 2016 were both
$0.9 million
.
The fair value of the remainder of the Company’s debt approximated carrying value at
June 30, 2017
and
September 30, 2016
as it is variable rate debt.
NOTE 7—WARRANTY RESERVES
IEC generally warrants its products and workmanship for up to twelve months from date of sale. As an offset to warranty claims, the Company is sometimes able to obtain reimbursement from suppliers for warranty-related costs or losses. Based on historical warranty claims experience and in consideration of sales trends, a reserve is maintained for estimated future warranty costs to be incurred on products and services sold through the balance sheet date.
A summary of additions to and charges against IEC’s warranty reserves during the period follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
Warranty Reserve
|
|
June 30,
2017
|
|
July 1,
2016
|
|
(in thousands)
|
|
|
|
|
|
|
|
Reserve, beginning of period
|
|
$
|
180
|
|
|
$
|
399
|
|
|
Provision
|
|
100
|
|
|
126
|
|
|
Warranty costs
|
|
(125
|
)
|
|
(228
|
)
|
|
Reserve, end of period
|
|
$
|
155
|
|
|
$
|
297
|
|
NOTE 8—STOCK-BASED COMPENSATION
The 2010 Omnibus Incentive Compensation Plan (the “2010 Plan”), was approved by the Company’s stockholders at the January 2011 Annual Meeting. The Company also has an ESPP, adopted in 2011, that provides for the purchase of Company common stock at a discounted stock purchase price. The 2010 Plan replaced IEC’s 2001 Stock Option and Incentive Plan (the “2001 Plan”), which expired in December 2011. The 2010 Plan, which is administered by the Compensation Committee of the Board of Directors, provides for the following types of awards: incentive stock options, nonqualified options, stock appreciation rights, restricted shares, restricted stock units, performance compensation awards, cash incentive awards, director stock and other equity-based and equity-related awards. Awards are generally granted to certain members of management and employees, as well as directors. Under the 2010 Plan, up to
2,000,000
shares of common stock may be issued over a term of
ten years
.
Stock-based compensation expense recorded under the 2010 and 2001 Plans, including the ESPP, totaled
$0.2 million
and
$0.5 million
for the
three and nine months ended
June 30, 2017
, respectively. Stock-based compensation expense recorded under the 2010 and 2001 Plans, including the ESPP, totaled
$0.2 million
and
$0.3 million
for the
three and nine months ended
July 1, 2016
, respectively. During the
nine months ended
July 1, 2016
, incentive compensation shares were returned by the Company’s former CEO resulting in a reduction to compensation expense of
$60.0 thousand
.
At
June 30, 2017
, there were
231,541
shares available to be issued under the 2010 Plan.
Expenses relating to stock options that comply with certain U.S. income tax rules are neither deductible by the Company nor taxable to the employee. Further information regarding awards granted under the 2001 Plan, 2010 Plan and ESPP is provided below.
Stock Options
When options are granted, IEC estimates the fair value of the option using the Black-Scholes option pricing model and recognizes the computed value as compensation cost over the vesting period, which is typically
four
years. The contractual term of options granted under the 2010 Plan is generally
seven
years.
Assumptions used in the Black-Scholes model and the estimated value of options granted during the
nine months ended
June 30, 2017
and
July 1, 2016
are included in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
Valuation of Options
|
|
June 30,
2017
|
|
July 1,
2016
|
|
Assumptions for Black-Scholes:
|
|
|
|
|
|
Risk-free interest rate
|
|
1.50
|
%
|
|
1.10
|
%
|
|
Expected term in years
|
|
4.0
|
|
|
4.0
|
|
|
Volatility
|
|
39
|
%
|
|
39
|
%
|
|
Expected annual dividends
|
|
none
|
|
|
none
|
|
|
|
|
|
|
|
|
Value of options granted:
|
|
|
|
|
|
Number of options granted
|
|
57,500
|
|
|
10,000
|
|
|
Weighted average fair value per share
|
|
$
|
1.19
|
|
|
$
|
1.40
|
|
|
Fair value of options granted (000s)
|
|
$
|
68
|
|
|
$
|
14
|
|
A summary of stock option activity, together with other related data, follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
June 30, 2017
|
|
July 1, 2016
|
|
Stock Options
|
|
Number
of Options
|
|
Wgtd. Avg.
Exercise
Price
|
|
Number
of Options
|
|
Wgtd. Avg.
Exercise
Price
|
|
Outstanding, beginning of period
|
|
759,795
|
|
|
$
|
4.43
|
|
|
717,645
|
|
|
$
|
4.40
|
|
|
Granted
|
|
57,500
|
|
|
3.64
|
|
|
10,000
|
|
|
4.64
|
|
|
Exercised
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Forfeited
|
|
(33,000
|
)
|
|
5.58
|
|
|
(17,250
|
)
|
|
5.82
|
|
|
Expired
|
|
(29,750
|
)
|
|
5.04
|
|
|
—
|
|
|
—
|
|
|
Outstanding, end of period
|
|
754,545
|
|
|
$
|
4.29
|
|
|
710,395
|
|
|
$
|
4.37
|
|
|
|
|
|
|
|
|
|
|
|
|
For options expected to vest
|
|
|
|
|
|
|
|
|
|
|
|
Number expected to vest
|
|
735,846
|
|
|
$
|
4.30
|
|
|
686,417
|
|
|
$
|
4.38
|
|
|
Weighted average remaining contractual term, in years
|
|
4.7
|
|
|
|
|
5.2
|
|
|
|
|
|
Intrinsic value (000s)
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
74
|
|
|
|
|
|
|
|
|
|
|
|
|
For exercisable options
|
|
|
|
|
|
|
|
|
|
|
|
Number exercisable
|
|
326,972
|
|
|
$
|
4.44
|
|
|
265,286
|
|
|
$
|
4.82
|
|
|
Weighted average remaining contractual term, in years
|
|
4.1
|
|
|
|
|
4.2
|
|
|
|
|
|
Intrinsic value (000s)
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
For non-exercisable options
|
|
|
|
|
|
|
|
|
|
|
|
Expense not yet recognized (000s)
|
|
|
|
$
|
477
|
|
|
|
|
|
$
|
553
|
|
|
Weighted average years to be recognized
|
|
2.1
|
|
|
|
|
2.8
|
|
|
|
|
Changes in the number of non-vested options outstanding, together with other related data, follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
June 30, 2017
|
|
July 1, 2016
|
|
Stock Options
|
|
Number
of Options
|
|
Wgtd. Avg.
Grant Date
Fair Value
|
|
Number
of Options
|
|
Wgtd. Avg.
Grant Date
Fair Value
|
|
Non-vested, beginning of period
|
|
489,109
|
|
|
$
|
1.43
|
|
|
546,145
|
|
|
$
|
1.41
|
|
|
Granted
|
|
57,500
|
|
|
1.19
|
|
|
10,000
|
|
|
1.40
|
|
|
Vested
|
|
(119,036
|
)
|
|
1.42
|
|
|
(111,036
|
)
|
|
1.43
|
|
|
Forfeited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Non-vested, end of period
|
|
427,573
|
|
|
$
|
1.41
|
|
|
445,109
|
|
|
$
|
1.41
|
|
Restricted (Non-vested) Stock
Certain holders of IEC restricted stock have voting and dividend rights as of the date of grant, but until vested, the shares may be forfeited and cannot be sold or otherwise transferred. At the end of the vesting period, which is typically
four
or
five years
(
three years
in the case of directors), holders have all the rights and privileges of any other IEC common stockholder. The fair value of a share of restricted stock is its market value on the date of grant, and that value is recognized as stock compensation expense over the vesting period.
A summary of restricted stock activity, together with related data, follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
June 30, 2017
|
|
July 1, 2016
|
|
Restricted (Non-vested) Stock
|
|
Number of
Non-vested
Shares
|
|
Wgtd. Avg.
Grant Date
Fair Value
|
|
Number of
Non-vested
Shares
|
|
Wgtd. Avg.
Grant Date
Fair Value
|
|
Outstanding, beginning of period
|
|
228,759
|
|
|
$
|
4.40
|
|
|
54,960
|
|
|
$
|
4.23
|
|
|
Granted
|
|
194,766
|
|
|
3.62
|
|
|
187,449
|
|
|
4.43
|
|
|
Vested
|
|
(29,948
|
)
|
|
4.25
|
|
|
(12,300
|
)
|
|
4.23
|
|
|
Shares withheld for payment of
taxes upon vesting of restricted stock
|
|
(1,036
|
)
|
|
3.86
|
|
|
(150
|
)
|
|
4.20
|
|
|
Forfeited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Outstanding, end of period
|
|
392,541
|
|
|
$
|
4.02
|
|
|
229,959
|
|
|
$
|
4.39
|
|
|
|
|
|
|
|
|
|
|
|
|
For non-vested shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense not yet recognized (000s)
|
|
|
|
$
|
1,021
|
|
|
|
|
|
$
|
988
|
|
|
Weighted average remaining years for vesting
|
|
2.1
|
|
|
|
|
2.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For shares vested
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate fair value on vesting dates (000s)
|
|
|
|
|
$
|
113
|
|
|
|
|
|
$
|
47
|
|
Stock Issued to Board Members
In addition to annual grants of restricted stock, included in the table above, Board members may elect to have their meeting fees paid in the form of shares of the Company’s common stock. The Company has not paid any meeting fees in stock since May 21, 2013.
NOTE 9—INCOME TAXES
Provision for income taxes during each of the
three and nine months ended
June 30, 2017
and
July 1, 2016
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
Income Tax Provision/Benefit
|
|
June 30,
2017
|
|
July 1,
2016
|
|
June 30,
2017
|
|
July 1,
2016
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
Provision for/(benefit from) income taxes
|
|
$
|
43
|
|
|
$
|
(6
|
)
|
|
$
|
43
|
|
|
$
|
(6
|
)
|
The Company has recorded a full valuation allowance on all deferred tax assets. Although a full valuation allowance has been recorded for all deferred tax assets, including net operating loss carryforwards (“NOLs”), these NOLs remain available to the Company to offset future taxable income and reduce cash tax payments. IEC had federal gross NOLs for income tax purposes of approximately
$31.7 million
at
September 30, 2016
, expiring mainly in years 2022 through 2025 and 2034 through 2035. The Company also has additional state NOLs available in several jurisdictions in which it files state tax returns.
Recent New York state corporate tax reform has resulted in the reduction of the business income base rate for qualified manufactures in New York State to
0%
beginning in fiscal 2015 for IEC. At
September 30, 2016
, the Company had
$1.2 million
of New York State investment tax and other credit carryforwards, expiring in various years through 2030. The credits cannot be utilized unless the New York state tax rate is no longer
0%
.
NOTE 10—MARKET SECTORS AND MAJOR CUSTOMERS
A summary of sales, according to the market sector within which IEC’s customers operate, follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
% of Sales by Sector
|
|
June 30,
2017
|
|
July 1,
2016
|
|
June 30,
2017
|
|
July 1,
2016
|
|
Aerospace & Defense
|
|
53%
|
|
43%
|
|
49%
|
|
39%
|
|
Medical
|
|
30%
|
|
39%
|
|
30%
|
|
44%
|
|
Industrial
|
|
15%
|
|
16%
|
|
18%
|
|
15%
|
|
Communications & Other
|
|
2%
|
|
2%
|
|
3%
|
|
2%
|
|
|
|
100%
|
|
100%
|
|
100%
|
|
100%
|
Two
individual customers each represented
10%
or more of sales for the
nine months ended
June 30, 2017
. One customer was from the Medical sector and represented
15%
of sales, while the other was from the Aerospace & Defense sector and represented
12%
of sales for the
nine months ended
June 30, 2017
.
Two
individual customers each represented 10% or more of sales for the
nine months ended
July 1, 2016
. Both customers were from the Medical sector, and represented
17%
of sales each.
Three
individual customers represented
10%
or more of receivables and accounted for
39%
of the outstanding balance at
June 30, 2017
.
Four
individual customers represented
10%
or more of receivables and accounted for
44%
of the outstanding balances at
July 1, 2016
.
Credit risk associated with individual customers is periodically evaluated by analyzing the entity’s financial condition and payment history. Customers generally are not required to post collateral.
NOTE 11—LITIGATION
From time to time, the Company may be involved in legal action in the ordinary course of its business, but management does not believe that any such proceedings, individually or in the aggregate, will have a material effect on the Company’s condensed consolidated financial statements.
NOTE 12—CAPITAL LEASE
Leases
On
November 18, 2016
, the Company entered into a sale-leaseback agreement, pursuant to the terms of the Purchase and Sale Agreement (the “PSA”), with Store Capital Acquisitions, LLC, a Delaware limited liability company (the “Purchaser”), for the sale of certain property, including the manufacturing facility located in Albuquerque, New Mexico (the “Property”). Albuquerque (the “Seller”) completed the sale of the Property to the Purchaser for an aggregate purchase price of approximately
$5.8 million
including a
$0.1 million
holdback held subject to a holdback of funds agreement. The net book value of assets sold was
$4.6 million
and the value of the assets acquired under the lease is
$5.8 million
. The Company recorded a deferred gain of
$1.1 million
related to the transaction, which is recorded in other long-term liabilities section of the condensed consolidated balance sheet. The proceeds from the transaction were used to pay off the Albuquerque Mortgage Loan and pay down Term Loan A. As part of the transaction, a Lease Agreement dated as of November 18, 2016 was entered into between the Seller and the Purchaser (the “Lease”). Pursuant to the Lease, the Seller is leasing the Property for an initial term of
15 years
, with
two
renewal options of
five
years each. The initial base annual rent is approximately
$0.5 million
and is subject to an annual increase equal to the lesser of
two percent
or
1.25
times the change in the Consumer Price Index. Late payments incur a charge of
5%
and bear interest at a rate of
18%
or the highest rate permitted by law. If an event of default occurs under the terms of the Lease, among other things, all rental amounts accelerate and become due and owing, subject to certain adjustments.
A summary of capital lease payments for the next five years follows:
|
|
|
|
|
|
|
|
|
Capital Lease Payment Schedule
|
|
Contractual
Principal
Payments
|
|
(in thousands)
|
|
|
|
|
Twelve months ended June
|
|
|
|
|
2018
|
|
$
|
480
|
|
|
2019
|
|
490
|
|
|
2020
|
|
499
|
|
|
2021
|
|
509
|
|
|
2022 and thereafter
|
|
6,016
|
|
|
Total capital lease payments
|
|
7,994
|
|
|
Less: amounts representing interest
|
|
(2,367
|
)
|
|
Present value of minimum lease payment
|
|
$
|
5,627
|
|
NOTE 13—EARNINGS (LOSS) PER SHARE
The Company applies the two-class method to calculate and present net income (loss) per share. Certain of the Company's restricted (non-vested) share awards contain non-forfeitable rights to dividends and are considered participating securities for purposes of computing net income (loss) per share pursuant to the two-class method. Under the two-class method, net earnings are reduced by the amount of dividends declared (whether paid or unpaid) and the remaining undistributed earnings are then allocated to common stock and participating securities, based on their respective rights to receive dividends. As the Company incurred a net loss for the nine months ended
June 30, 2017
and losses are not allocated to participating securities under the two-class method, such method is not applicable for the aforementioned interim reporting period.
Basic earnings per common share are calculated by dividing income available to common stockholders by the weighted average number of shares outstanding during each period. Diluted earnings per common share add to the denominator incremental shares resulting from the assumed exercise of all potentially dilutive stock options, as well as restricted stock and restricted stock units. Options, restricted stock and restricted stock units are primarily held by directors, officers and certain employees.
A summary of shares used in the earnings per share (“EPS”) calculations follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
Earnings Per Share
|
|
June 30,
2017
|
|
July 1,
2016
|
|
June 30,
2017
|
|
July 1,
2016
|
|
Basic net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
806
|
|
|
$
|
1,605
|
|
|
$
|
(674
|
)
|
|
$
|
4,610
|
|
|
Less: Income attributable to non-vested shares
|
|
(10
|
)
|
|
(18
|
)
|
|
—
|
|
|
(52
|
)
|
|
Net income (loss) available to common stockholders
|
|
$
|
796
|
|
|
$
|
1,587
|
|
|
$
|
(674
|
)
|
|
$
|
4,558
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
10,193,200
|
|
|
10,211,347
|
|
|
10,176,626
|
|
|
10,210,805
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per share
|
|
$
|
0.08
|
|
|
$
|
0.16
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
806
|
|
|
$
|
1,605
|
|
|
$
|
(674
|
)
|
|
$
|
4,610
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing basic net income (loss) per share
|
|
10,193,200
|
|
|
10,211,347
|
|
|
10,176,626
|
|
|
10,210,805
|
|
|
Dilutive effect of non-vested shares
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Shares used in computing diluted net income (loss) per share
|
|
10,193,200
|
|
|
10,211,347
|
|
|
10,176,626
|
|
|
10,210,805
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per share
|
|
$
|
0.08
|
|
|
$
|
0.16
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.45
|
|
The diluted weighted average share calculations do not include the following securities, which are not dilutive to the EPS calculations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
June 30,
2017
|
|
July 1,
2016
|
|
June 30,
2017
|
|
July 1,
2016
|
|
Anti-dilutive shares excluded
|
|
1,147,086
|
|
|
940,354
|
|
|
1,147,086
|
|
|
940,354
|
|